[Federal Register Volume 66, Number 208 (Friday, October 26, 2001)]
[Proposed Rules]
[Pages 54186-54190]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-27120]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Part 408

[CMS-4007-P]
RIN 0938-AK42


Medicare Program; Supplementary Medical Insurance Premium 
Surcharge Agreements

AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.

ACTION: Proposed rule.

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SUMMARY: This proposed rule would implement legislation contained in 
section 1839(e) of the Social Security Act, as amended by section 144 
of the Social Security Act Amendments of 1994 and section 4582 of the 
Balanced Budget Act of 1997. That legislation created a new Medicare 
premium payment arrangement whereby States and local government 
agencies can enter into an agreement with the Secretary to make 
periodic lump sum payments for the Supplementary Medical Insurance 
(SMI) late enrollment premium surcharge amounts due for a designated 
group of eligible enrollees. Under this proposal, we would define and 
set out the basic rules for the new SMI premium surcharge billing 
agreement.

DATES: Comments will be considered if we receive them at the 
appropriate address, as provided below, no later than 5 p.m. on 
December 26, 2001.

ADDRESSES: Mail written comments (one original and three copies) to the 
following address only:
    Centers for Medicare & Medicaid Services, Department of Health and 
Human Services, Attention: CMS-4007-P, P.O. Box 8013, Baltimore, MD 
21244-8013.
    If you prefer, you may deliver, by courier, your written comments 
(one original and three copies) to one of the following addresses:
    Hubert H. Humphrey Building, Room 443-G, 200 Independence Avenue, 
SW, Washington, DC 20201, or
Centers for Medicare and Medicaid Services, C5-14-03, Central Building, 
7500 Security Boulevard, Baltimore, MD 21244-1850.

    Comments mailed to those addresses designated for courier delivery 
may be delayed and could be considered late. Because of staffing and 
resource limitations, we cannot accept comments by facsimile (FAX) 
transmission. Please refer to file code CMS-4007-P on each comment.
    Comments received timely will be available for public inspection as 
they are received, beginning approximately 3 weeks after publication of 
this document, in room C5-12-08 of the Centers for Medicare & Medicaid 
Services, 7500 Security Boulevard, Baltimore, Maryland, Monday through 
Friday of each week from 8:30 a.m. to 5 p.m. Please call (410) 786-7197 
to make an appointment to view comments.

FOR FURTHER INFORMATION CONTACT: Sandy Clarke, (410) 786-7451.

SUPPLEMENTARY INFORMATION:

I. Background

    Section 1839(e) of the Social Security Act (the Act), as amended by 
section 144 of the Social Security Act Amendments of 1994 (Pub. L. 103-
432, October 31, 1994), allows States to enter into agreements with us 
to pay a lump sum for the Part B premium late enrollment surcharge 
amounts due for a designated group of eligible enrollees. Section 4582 
of the Balanced Budget Act of 1997 (Pub. L. 105-33) (BBA) amended the 
Act by adding new language that allows local government agencies to 
also pay the surcharge. Under section 4582 of the BBA, any appropriate 
State or local government agency specified by the Secretary may enter 
into a Supplementary Medical Insurance (SMI) premium surcharge 
agreement.
    This legislation was requested to enable State and local government 
agencies that are discontinuing to offer a health benefits package to 
their retirees, and requesting that the retirees utilize Medicare for 
their health insurance, to pay the ensuing SMI premium surcharge on a 
lump sum basis.
    While covered by the State or local government agency health care 
plans, some retirees, who believed that these health plans were 
sufficient to cover their health care needs, chose not to enroll in 
Medicare when they first became eligible, or enrolled and subsequently 
canceled their Medicare coverage. When these retirees were notified by 
their State or local government agency retirement offices that those 
agencies would no longer offer a health benefit package (and that it 
therefore would be necessary for the retirees to enroll or reenroll in 
Medicare) they learned that they were subject to the late enrollment 
premium surcharge. State and local government agency retirement offices 
contacted us and requested either a waiver of the surcharge or 
establishment of a special enrollment period for the affected retirees. 
We denied these requests and determined that the affected retirees were 
subject to the late enrollment premium surcharge. This prompted some 
State and local government agency retirement offices to offer to pay 
the surcharge portion of the Supplemental Medical Insurance premium on 
behalf of their affected retirees. It also prompted a request from a 
local government agency to enter into a special billing and payment 
arrangement with us in order periodically to receive a single bill and 
pay a lump sum for the surcharge amounts due from a specified group of 
its retirees.
    Since there was no law or regulation in place that would have 
allowed us to send a State or local government agency a single bill to 
pay a lump sum for the SMI premium surcharge portion for a group of 
enrollees, we initially denied the request. Subsequently, the Congress 
enacted legislation that allowed States to pay the Secretary, on a 
quarterly or other periodic basis, a lump sum for the total amount of 
the SMI premium surcharges for a group of Medicare enrollees (section 
1839(e) of the Act, section 144 of the Social Security Act Amendments 
(Pub. L. 103-432)). Section 4582 of the BBA subsequently amended 
section 1839(e) of the Act by adding language that would also allow any 
appropriate State or local government agency specified by the Secretary 
to enter into an agreement to pay the SMI premium surcharges on a 
periodic lump sum basis. Because the CMS third party billing system, 
which will be used for billing and payment of these surcharge amounts, 
was developed to accommodate monthly billing and payments, all SMI 
premium surcharge amounts would be billed and paid on a monthly basis.
    The election to make lump sum payments of SMI premium surcharges by 
a State or local government agency under an SMI premium surcharge 
agreement would be strictly voluntary and would be provided as a 
convenience to the State or local government agency.

[[Page 54187]]

II. Provisions of the Proposed Regulations

    We are proposing rules to implement section 1839(e) of the Act, 
section 144 of the Social Security Act Amendments of 1994 (Pub. L. 103-
432), and section 4582 of the BBA. We would make the following changes 
in 42 CFR part 408:
    We would add a new subpart H to the regulations in part 408 
(Premiums for Supplementary Medical Insurance). The new subpart would 
be entitled Supplementary Medical Insurance Premium Surcharge 
Agreements.
    Within the subpart, we propose to add a section that would contain 
the authority for allowing States and local government agencies to 
enter into an agreement with us to pay, on a periodic basis, a lump sum 
for the total amount of the SMI premium surcharges for a group of 
eligible Medicare enrollees.
    Since there are no existing regulations that prescribe or describe 
the basic rules for making periodic lump sum payments of the SMI 
premium surcharge under a special billing arrangement, we propose to 
add sections entitled Definitions, Conditions for participation, 
Application procedures, Billing and payment procedures, and Termination 
of SMI premium surcharge agreements. In the Definitions section, we 
would define SMI premium surcharge and SMI premium surcharge agreement. 
SMI premium surcharge would be defined as the amount that the standard 
monthly SMI premium would be increased for late enrollment and for 
reenrollment as specified in Secs. 408.22 through 408.25. SMI premium 
surcharge agreement would be defined as an agreement entered into 
between a State or local government agency and us whereby the State or 
local government agency would periodically pay a lump sum for the 
premium surcharge amounts due from a specified group of eligible 
enrollees.
    The Conditions for participation section would identify individuals 
who could be included under an SMI premium surcharge agreement, 
identify individuals excluded from coverage under an agreement, and 
state the need to secure the written consent of each enrollee covered 
under the agreement. This section would also state that as a condition 
for participation, the State or local government agency would be 
required to establish an automated data exchange with us to 
electronically transmit accretion, deletion, and change records and 
make all monthly SMI premium surcharge payments via electronic funds 
transfer.
    We would identify eligible individuals as those who are currently 
enrolled under Medicare Part B (SMI) and are currently billed for SMI 
base premiums and surcharges either through direct remittance or 
benefit withholding. Eligible individuals may also be those who receive 
a Railroad Retirement Board or Civil Service annuity and are having the 
SMI premium and surcharge withheld.
    We would identify individuals excluded from coverage under an SMI 
premium surcharge agreement as those who are not currently enrolled in 
SMI, those whose SMI premiums are currently being paid by a State 
Welfare Agency under a State buy-in agreement, or those whose SMI 
premiums and surcharges are currently being paid under a group billing 
agreement.
    In the Application procedures section, we would describe how the 
State or local government agency may contact its regional office, 
obtain an application, and return it for approval.
    The Billing and payment section would state that the State or local 
government agency must pay the SMI premium surcharge for each eligible 
enrollee who is included in the agreement for the time period beginning 
with the month the enrollee is accreted and continuing through the 
month the State or local government agency notifies us to delete the 
enrollee, the month the enrollee's Part B coverage terminates, or the 
month of the enrollee's death, whichever comes first.
    In the Termination of SMI premium surcharge agreement section, we 
would say that a State or local government agency may voluntarily 
terminate an SMI premium surcharge agreement by notifying us, in 
writing, at least 30 days before the termination date.
    We would also state that we may terminate an SMI premium surcharge 
agreement with 30 days notice if the State or local government agency 
fails to comply with the terms of the agreement, is delinquent in 
payment 60 days or more three times in any calendar year, or fails to 
comply with regulations or instructions the Secretary may prescribe.

III. Collection of Information Requirements

    Under the Paperwork Reduction Act of 1995 (PRA 1995), we are 
required to provide 60 days notice in the Federal Register and solicit 
public comment before a collection of information requirement is 
submitted to the Office of Management and Budget (OMB) for review and 
approval. In order to fairly evaluate whether an information collection 
should be approved by OMB, section 3506(c)(2)(A) of the PRA 1995 
requires that we solicit comment on the following issues:
     The need for the information collection and its usefulness 
in carrying out the proper functions of our agency.
     The accuracy of our estimate of the information collection 
burden.
     The quality, utility, and clarity of the information to be 
collected.
     The minimization of the information collection burden on 
the affected public, including automated collection techniques.
    We are seeking comments on these issues for the provisions 
discussed below:

Section 408.202  Conditions for Participation

    Under this section, a State or local government agency must secure 
from each enrollee a written signed, written authorization statement 
that contains authorizations for us to send billing notices directly to 
the State or local government agency and for the release to us of 
information required under the SMI premium surcharge agreement. The 
burden associated with this requirement is the time and effort for the 
enrollee to sign the required authorization statement. It is 
anticipated that for the two States affected by this requirement, each 
State will be required to obtain an average of 1,175 authorizations per 
State. Since this requirement will be standardized and incorporated 
into the enrollment process, we anticipate that it will take each 
enrollee 5 minutes to provide the necessary authorization. Therefore, 
the total burden associated with this requirement is 196 hours (5 
minutes  x  1,175 enrollees  x  2 entities = 196 total hours).
    This section also requires that the States maintain the 
authorization statement for each enrollee in the State or local 
government agency files for so long as the enrollee is covered by the 
agreement. Given that this requirement affects only two States, it is 
not subject to the PRA under 5 CFR 1320.3(c).
    Lastly, this section requires a State or local government agency to 
certify to us, in writing, that an authorization statement is on file 
for each enrollee covered under the SMI premium surcharge agreement. 
Only one certification is necessary for the entire group of covered 
enrollees. Given that this this requirement affects only two States, it 
is not subject to the PRA under 5 CFR 1320.3(c).

Section 408.205  Application Procedures

    Under this section, a State interested in entering into an 
agreement must return to the Regional Office (RO) two

[[Page 54188]]

copies of the signed agreement, the third party information form, and a 
description of the enrollees who will be covered by the agreement, 
showing that they meet the conditions for participation described in 
Sec. 408.202(a).
    We estimate that two States/agencies will apply for an agreement. 
Thus, this requirement is not subject to the PRA in accordance with 5 
CFR 1320.3(c).

Section 408.207  Billing and Payment Procedures

    Under paragraph (a), Accreting and deleting enrollees, of this 
section, the State or local government agency must electronically 
transmit an input file to us containing accretion and deletion records 
at least once each calendar month, but may transmit this information as 
often as once a day.
    We estimate that two States/agencies will apply for an agreement 
and be subject to this requirement. Thus, this requirement is not 
subject to the PRA in accordance with 5 CFR 1320.3(c).
    Under paragraph (d) of this section, if a State or local government 
agency disagrees with the amount assessed in a billing statement or 
interest charge, it must notify us as required under this section. 
Given that this activity is conducted as part of an administrative 
action, audit, and/or investigation, this requirement is exempt from 
the PRA under 5 CFR 1320.4.

Section 408.210  Termination of SMI Premium Surcharge Agreement

    Under paragraph (a) Termination by the State or local government 
agency, if the State or local government agency voluntarily terminates 
its agreement with us, it must notify us, in writing, at least 30 days 
before the effective date of the termination.
    We estimate that two States/agencies will be subject to the 
provisions of this section. Thus, this requirement is not subject to 
the PRA in accordance with 5 CFR 1320.3(c).
    We have submitted a copy of this proposed rule to OMB for its 
review of the information collection requirement in Sec. 408.202. This 
requirement is not effective until it has been approved by the OMB.
    If you have any comments on any of these information collection and 
recordkeeping requirements, please mail one original and three copies 
directly to the following:

Centers for Medicare & Medicaid Services, Office of Information 
Services, Standards and Security Group, Division of CMS Enterprise 
Standards, 7500 Security Boulevard, Room N2-14-26, Baltimore, MD 21244-
1850, Attn: Julie Brown, CMS 4007-P.
    and,
Office of Information and Regulatory Affairs, Office of Management and 
Budget, New Executive Office Building, Room 10235, Washington, DC 
20503, Attn: Allison Herron Eydt, CMS Desk Officer.

IV. Response to Comments

    Because of the large number of items of correspondence we normally 
receive on Federal Register documents published for comment, we are not 
able to acknowledge or respond to them individually. We will consider 
all comments we receive by the date and time specified in the DATES 
section of this preamble, and, if we proceed with a subsequent 
document, we will respond to the comments in the preamble to that 
document.

V. Regulatory Impact Statement

A. Overall Impact

    We have examined the impacts of this proposed rule as required by 
Executive Order 12866 (September 1993, Regulatory Planning and Review) 
and the Regulatory Flexibility Act (RFA) (September 19, 1980, Public 
Law 96-354). Executive Order 12866 directs agencies to assess all costs 
and benefits of available regulatory alternatives and, if regulation is 
necessary, to select regulatory approaches that maximize net benefits 
(including potential economic, environmental, public health and safety 
effects; distributive impacts; and equity). A regulatory impact 
analysis (RIA) must be prepared for major rules with economically 
significant effects ($100 million or more annually). This is not a 
major rule. It would have no economic impact, on either costs or 
savings, because either the enrollee or the State or local government 
agency would remit the same amount to us whether or not there is an SMI 
premium surcharge agreement in effect. The only difference is that 
under this proposed rule, the State or local government agency would be 
allowed to voluntarily elect to remit SMI premium surcharge amounts in 
a lump sum payment on behalf of eligible Medicare enrollees.
    The RFA requires agencies to analyze options for regulatory relief 
of small businesses. For purposes of the RFA, small entities include 
small businesses, nonprofit organizations, and government agencies. 
Most hospitals and most other providers and suppliers are small 
entities, either by nonprofit status or by having revenues of $5 
million or less annually. Individuals and States are not included in 
the definition of small entities. Therefore, we have determined, and we 
certify, that this proposed regulation would not result in a 
significant impact on a substantial number of small entities.
    In addition, section 1102(b) of the Social Security Act (the Act) 
requires us to prepare a regulatory impact analysis if a rule may have 
a significant impact on the operations of a substantial number of small 
rural hospitals. This analysis must conform to the provisions of 
section 603 of the RFA. For purposes of section 1102(b) of the Act, we 
define a small rural hospital as a hospital located outside of a 
Metropolitan Statistical Area with fewer than 50 beds. This rule would 
have no impact on any small rural hospitals. Therefore, we have 
determined, and we certify, that this proposed regulation would not 
have a significant effect on the operations of a substantial number of 
small rural hospitals.

B. The Unfunded Mandates Act

    Section 202 of the Unfunded Mandates Reform Act of 1995 requires 
that agencies assess anticipated costs and benefits before issuing any 
rule that may result in an annual expenditure by State, local, or 
tribal governments, in the aggregate, or by the private sector, of $100 
million. This proposed rule would have no effect on the annual 
expenditures of any State, local, or tribal government, or the private 
sector. Participation in an SMI premium surcharge agreement is strictly 
voluntary and would not change the total amount of SMI premium 
surcharges paid by a State or local government agency. Therefore, we 
have determined, and we certify, that this proposed regulation would 
not result in an annual expenditure by State, local, or tribal 
governments, in the aggregate, or by the private sector, of $100 
million.

C. Federalism

    Executive Order 13132 establishes certain requirements that an 
agency must meet when it promulgates a proposed rule (and subsequent 
final rule) that imposes substantial direct requirement costs on State 
and local governments, preempts State law, or otherwise has Federalism 
implications. This proposed rule would impose no direct requirement 
costs on State and local governments, would not preempt State law, or 
have any Federalism implications. Participation is strictly voluntary 
and would not change the total amount of SMI premium surcharges paid by 
a State or local government agency.

[[Page 54189]]

    In accordance with the provisions of Executive Order 12866, this 
proposed rule was reviewed by the Office of Management and Budget. This 
proposed rule is not a major rule as defined at 5 USC 804(2).

List of Subjects in 42 CFR Part 408

    Medicare.

    Accordingly, the Centers for Medicare & Medicaid Services proposes 
to amend 42 CFR chapter IV, part 408 as follows:

PART 408--PREMIUMS FOR SUPPLEMENTAL MEDICAL INSURANCE

    1. The authority citation for part 408 continues to read as 
follows:

    Authority: Secs. 1102 and 1871 of the Social Security Act (42 
U.S.C. 1302 and 1395hh).

    2. Add a new subpart H , consisting of Secs. 408.200 through 
408.210, to part 408 to read as follows:
Subpart H--Supplementary Medical Insurance Premium Surcharge Agreements
Sec.
408.200   Statutory basis.
408.201   Definitions.
408.202   Conditions for participation.
408.205   Application procedures.
408.207   Billing and payment procedures.
408.210   Termination of SMI premium surcharge agreement.

Subpart H--Supplementary Medical Insurance Premium Surcharge 
Agreements


Sec. 408.200  Statutory basis.

    This subpart implements provisions of section 1839(e) of the Social 
Security Act (the Act) as amended by section 4582 of the Balanced 
Budget Act of 1997 (BBA). Section 1839(e) of the Act, as amended, 
allows State or local government agencies to enter into an agreement 
with the Secretary to pay, on a quarterly or other periodic basis, a 
lump sum for the total of the Supplementary Medical Insurance (SMI) 
premium late enrollment surcharge amounts due for a group of eligible 
enrollees.


Sec. 408.201  Definitions.

    For purposes of this subpart, the following definitions apply:
    SMI premium surcharge means the amount that the standard monthly 
SMI premium is increased for late enrollment and for reenrollment as 
specified in Secs. 408.22 through 408.25.
    SMI premium surcharge agreement means a written arrangement between 
the Secretary and a State or local government agency to pay, on a 
quarterly, monthly, or other periodic basis, a lump sum for the SMI 
premium surcharge amounts due for a designated group of eligible 
enrollees.


Sec. 408.202  Conditions for participation.

    (a) A State or local government agency may apply to CMS to enter 
into an SMI premium surcharge agreement if the following conditions are 
met:
    (1) Each individual designated for coverage under the agreement 
must be currently enrolled in Medicare Part B at the time the 
individual is accreted.
    (2) Each enrollee designated for coverage under the agreement must 
be paying the base premium and surcharge through direct remittance or 
benefit withholding from social security or railroad retirement 
benefits or a civil service annuity at the time of accretion.
    (3) Each enrollee designated for coverage under the agreement must 
not have premiums currently paid by a State Welfare Agency under a 
State buy-in agreement as described in Sec. 407.40 of this chapter or 
under a group billing arrangement as described in Sec. 408.80.
    (b) The State or local government agency must secure from each 
enrollee a signed, written authorization statement that must contain 
authorization for CMS to send billing notices directly to the State or 
local government agency and for the release to CMS of information 
required under the SMI premium surcharge agreement.
    (c) The authorization statement for each enrollee must be retained 
in the State or local government agency files for so long as the 
enrollee is covered by the agreement. These authorization statements 
need not be forwarded to CMS.
    (d) The State or local government agency must certify to CMS, in 
writing, that an authorization statement is on file for each enrollee 
covered under the SMI premium surcharge agreement. Only one 
certification is necessary for the entire group of covered enrollees.
    (e) A State or local government agency must establish an automated 
data exchange with CMS using the Third Party Premium Collection System, 
in order to electronically transmit an input file that will be used to 
accrete or delete enrollees from the billing system.


Sec. 408.205  Application procedures.

    (a) A State or local government agency must contact its CMS 
regional office (RO) to request an information packet, consisting of 
the Premium Surcharge Payment Handbook, the Agreement, and the Third 
Party Agency Information Form.
    (b) If interested in entering into an agreement, the State or local 
government agency must return to the RO two copies of the signed 
Agreement, two completed copies of the Third Party Information Form, 
and two copies of a description of the enrollees who will be covered by 
the agreement, showing that they meet the conditions for participation 
described in Sec. 408.202(a).
    (c) CMS reviews the application documents, and, when approved, 
sends the State or local government agency, and the RO, a signed copy 
of the agreement and instructions for initiating the electronic funds 
transfer process.


Sec. 408.207  Billing and payment procedures.

    (a) Accreting and deleting enrollees. The State or local government 
agency must electronically transmit an input file to CMS containing 
accretion and deletion records as follows:
    (1) Input files must be transmitted at least once each calendar 
month, but may be transmitted as often as once a day.
    (2) With the exception of a deletion because of the death of an 
enrollee, CMS will not accrete or delete enrollees retroactively.
    (3) The State or local government agency must pay the SMI premium 
surcharge for each eligible enrollee who is included in the agreement 
for the time period beginning with the month the enrollee is accreted 
and continuing through the month the State or local government agency 
notifies CMS to delete the enrollee, the month the enrollee's Part B 
coverage terminates, or the month of the enrollee's death, whichever 
comes first.
    (b) Payment and grace period. Payment must be made to CMS as 
follows:
    (1) Payment to CMS must be received by CMS by the 1st day of each 
month.
    (2) There is a 25-day grace period for receipt of payment.
    (3) Payment must be made to CMS via electronic funds transfer.
    (c) Late payment penalties. CMS will assess interest for any 
payment it does not receive by the 1st day of the month as follows:
    (1) Interest will be assessed at the Supplementary Medical 
Insurance trust fund rate as computed for new investments in accordance 
with section 1841(c) of the Social Security Act.
    (2) Interest will be waived if the full payment is received by the 
25th day of the month in which it is due.
    (3) Interest will be calculated and assessed in 30-day increments.
    (4) Interest will be assessed on the balance of the amount billed 
that remains unpaid at the expiration of the grace period and unpaid 
balances from prior periods.

[[Page 54190]]

    (5) Interest will continue to accrue on unpaid amounts until the 
balance is paid in full.
    (d) Disagreement over billing amounts or interest. If the State or 
local government agency disagrees with the amount assessed in a billing 
statement or interest charge, it must notify CMS as follows:
    (1) The State or local government agency must provide evidence 
suitable to CMS to substantiate its claim.
    (2) The State or local government agency must continue to make full 
payment while CMS evaluates the evidence provided.
    (3) Credit for payment amounts or interest that CMS determines to 
be due to the State or local government agency will be reflected as an 
adjustment in subsequent bills, effective on the date the corrected 
amount would have been due.


Sec. 408.210  Termination of SMI premium surcharge agreement.

    (a) Termination by the State or local government agency. The State 
or local government agency may voluntarily terminate its agreement with 
CMS as follows:
    (1) The State or local government agency must notify CMS, in 
writing, at least 30 days before the effective date of the termination.
    (2) The State or local government agency must pay any unpaid 
premium surcharge amounts and interest due within 30 days after the 
effective date of the termination.
    (3) Interest will continue to accrue until all amounts due are paid 
in full.
    (b) Termination by CMS. CMS may terminate the agreement with a 
State or local government agency as follows:
    (1) If CMS finds that the State or local government agency is not 
acting in the best interest of the enrollees, or CMS, or for any other 
reason, the arrangement may be terminated at any time.
    (2) If a State or local government agency's payments are delinquent 
60 days or more, 3 times in any calendar year, CMS may terminate the 
agreement with 30 days advance notice.
    (3) If the State or local government agency fails to comply with 
the terms of the agreement and/or procedures promulgated by CMS, CMS 
may terminate the agreement with 30 days advance notice.
    (4) The State or local government agency must pay all outstanding 
premium surcharge and interest amounts due within 30 days after the 
effective date of the termination.
    (5) Interest will continue to accrue until all amounts due are paid 
in full.
    (6) After the agreement is terminated, CMS will resume collection 
of the premium surcharge from the enrollees covered under the 
terminated agreement.
    (7) If an agreement is terminated by CMS, the State or local 
government agency must wait 3 years from the effective date of the 
termination before it can request to enter into another SMI premium 
surcharge agreement.

(Catalog of Federal Domestic Assistance Program No. 93.773, 
Medicare-Hospital Insurance; and Program No. 93.774, Medicare-
Supplementary Medical Insurance Program)

    Dated: September 21, 2001.
Thomas A. Scully,
Administrator, Centers for Medicare & Medicaid Services.

    Dated: October 24, 2001.
Tommy G. Thompson,
Secretary.
[FR Doc. 01-27120 Filed 10-25-01; 8:45 am]
BILLING CODE 4120-01-P